WINNING a lottery often brings life-changing money – enough for most lucky ticketholders to easily pay off a mortgage or buy a new home, purchase a new car, and so on. However, for the winners of the $1.5billion Powerball jackpot, there’s so much money available to them that even after doing all of those things they would still be left with cash beyond their wildest dreams.
So just what should they do with their money? We want you to help them decide – and you can win an exquisite Cross pen for the best answer.
In March 2014, British Columbia resident Friedrich Mayrhofer became $50million richer by winning the Lotto Max jackpot. However, in fear that his newfound wealth could hurt his quiet life, he waited nearly two years before claiming the cash.
In fact, it was just before the deadline to claim that he finally signed over the ticket to a trust with a series of unnamed beneficiaries. He then sent his lawyer to claim the prize – only to find out that he would have to collect in person to earn the winnings. As a result, he made the trip and scooped the prize: but the only plans he revealed were to take a vacation and renovate his home.
So what do the experts suggest that big winners do with their money?
John DeGoey, portfolio manager at Burgeonvist-Bick, believes the first thing to do is stop and think.
He said: “Ask yourself questions like: how will I live my life in accordance with my deepest values? Now that money is no object, what things can I pursue? Do I want to leave a legacy?
“The one thing I would NOT do is to help friends and family in a significant way (at first, anyway). Maybe a small bit of assistance and then a follow-up to verify that the gift was not squandered.”
Meanwhile, Thane Stanner, CIM®, FCSI I, Director, Wealth Management, Portfolio Manager for ultra-high net worth investors at StennerZohny Investment Partners+, a multi-family office within Richardson GMP Limited, a firm with $26B in assets under advisement, believes winners should take a step-by-step approach.
“Tell as few people as possible that you won, as there will be 100’s of ‘new friends’ coming out of the woodwork,” he said. “Get some professional advice ASAP who can guide you through this significant ‘liquidity event’. Develop an investment policy statement (IPS). Figure out your desired pre-tax cash flows and then sit on cash for six-12 months to educate yourself on various investment strategies before deploying.”
So what do you think the winners should do with the money? Leave a comment with your thoughts and the best response we receive by Friday (January 22), will win the Cross pen.